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Informist, Thursday, Nov. 28, 2024

 

--FCI: Govt allocates 2.5 mln tn wheat to sell under open market sales 

--Official: FCI to start wheat open market sales by next week

--Govt to sell 2.5 mln tn wheat to private parties through e-auctions 

--Govt to sell fair and average quality wheat at INR 2,325/100 kg 

--Govt to sell wheat under reduced specifications at INR 2,300/100 kg 

 

By J. Navya Sruthi and Afra Abubacker

 

MUMBAI – The government has allocated 2.5 million tonnes of wheat for open market sales scheme for the financial year 2024-25 (Apr-Mar), according to a letter from the Ministry of Consumer Affairs, Food, and Public Distribution to the Food Corp. of India, reviewed by Informist. Typically, FCI starts wheat auctions in July or August. This year, owing to lower procurement and falling stocks, it delayed open market sales. 

 

The Food Corp. of India is likely to start open market sales of wheat by next week, an FCI official told Informist. The agency will offload "25 LMT (2.5 million tonnes) wheat to Private Parties from the Central Pool Stock of FCI through e-auction under OMSS (D) (Open Market Sales Scheme – Domestic) policy", according to the letter. 

 

For the current year, the government has set the reserve price of fair and average quality wheat at 2,325 rupees per 100 kg, and the price of wheat under reduced specifications at 2,300 rupees per 100 kg, the official said. Under the open market sales scheme, the government fixes the price of rice and wheat and sells the grains to bulk buyers such as states and private millers through electronic auctions. The government's weekly e-auctions of rice and wheat are meant to cool down retail prices across the country.

 

According to a senior government official, the entire quantity of wheat will be sold through about a dozen auctions concluding by the end of March. The official said the amount of wheat allocated per miller per week is yet to be decided. "We will have to keep in mind that this is the total amount we have been allowed to offload, and it needs to run through to the end," he said.

 

According to the FCI official, offloading wheat from government godowns will help the agency create space to store the new rice crop. Though paddy procurement began last month, it has been adversely affected by a storage crunch. Amid farmers' protests, the government has taken several steps to make room for paddy, including shifting surplus rice out of Punjab to godowns in other states.

 

Since August, FCI has been offloading rice from its godowns through open market sales. However, the agency has only sold 546,000 tonnes of rice so far, against the sales target of 1 million tonnes for FY25, the FCI official said.

 

During FY24, wheat sales under the open market scheme were at an all-time high of 9.4 mln tn. Last year, the reserve price for fair and average quality wheat was 2,150 rupees per 100 kg, and 2,125 rupees for reduced specification wheat.

 

This year the government delayed open market sales of wheat owing to reduced procurement in Apr-Jun. It could not meet the target of procuring 30-32 million tonnes for the rabi marketing season, which is coterminous with the financial year. Procurement of wheat ended Jun. 30, with the Centre buying 26.6 million tonnes from farmers, slightly more than 26.2 million tonnes procured in 2023-24.

 

Due to lower procurement, wheat stocks with FCI fell below the buffer norm in September. However, as of Nov. 1, wheat stocks with the agency were 2% higher on year at 22.3 million tonnes, though they were down 6.4% from a month ago, according to data from the nodal food procurement agency. The on-year rise was the first in 11 months.

 

According to buffer norms, the minimum wheat stocks for Oct-Dec should be 20.52 million tonnes--operational stock of 17.52 million tonnes and strategic reserve of 3 million tonnes. The government sets the buffer requirement of food grains for every quarter, and the FCI has to maintain the mandated level. 

 

On Thursday, wheat prices in Rajasthan's Kota market were unchanged from the previous day at INR 2,775 per 100 kg, according to a local trader.  End

 

With inputs from Pallavi Singhal

Edited by Rajeev Pai

 

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